I assume the Deputy is referring to the Seed Enterprise Investment Scheme (SEIS), which the UK introduced to supplement its Enterprise Investment Scheme (EIS). The SEIS provides a higher rate of relief for qualifying investments in early stage enterprises, than is available under EIS and was introduced with effect from the 6th of April this year. We have a similar incentive to the EIS called the Employment and Investment Incentive (EII), which commenced on 25 November 2011, following the receipt of State Aid approval from the European Commission. The EII provides tax relief of 30% on investments made in small and certain medium-sized enterprises, including early stage enterprises, with the possibility of a further 11% in tax relief at the end of a three year holding period. The incentive was previously known as the Business Expansion Scheme and was significantly amended to target limited Exchequer resources towards job creation. As part of these changes, access to the incentive was made available to the majority of small and medium-sized companies (SMEs).
Figures from the Revenue Commissioners show that the level of funding raised by SMEs under the Business Expansion Scheme has been declining since 2008. This could be related to the economic downturn or to a lower appetite for risk among investors. It is too early to say whether the changes brought about by the introduction of EII will have the desired affect and halt such decline. However, the peak period for raising investments under EII is November/December and a better picture of the impact of the changes should be available next year.
The introduction of any scheme that would provide higher tax relief for investments in certain companies could have the capacity to skew investments towards such companies. This could work to the detriment of other equally deserving companies that need to raise risk capital investments. Ultimately, the priority of the Government is to incentivise investments where they are most likely to create jobs. Therefore, I am inclined to be cautious as regards implementing further changes to the tax incentives available for such investments at the current time.